Summary
1. Last quarter, Infinera biggest customer “was an Internet content provider.” 2. As the source article points out, there has been conjecture about the supplier doing business with Google since 2005. 3. There are definitely indications that Google was the buyer that “compris[ed] 23 percent of Infinera’s revenues” in the previous quarter.
Analysis
With Google apparently being the customer for Infinera, it helps explain why it is not likely to be the leading buyer in its first quarter. It seems that the vendor is not really building a transport network for the content firm. Evidently, Infinera is just doing connectivity for Google in its big data centers. As a result, it could be not said that the manufacturer is exactly positioned well at Google for the long term. And Infinera’s explanation that market lumpiness is the reason that this customer will not likely top the list in this quarter seems at least a little disingenuous.
In early 2008, we wrote about Google’s proclivity for building networks and its obsession with using the lowest cost solutions available. This realization provides some clarification as to why “the difference in margins [was] greater than usual” for Infinera last quarter – as reported in another Light Reading article. All in all, it just may be important that “the largest customer wasn’t Level 3 Communications.”
